Property investors put money in London market

Property investors put money in London market

Overseas property buyers remain keen to transfer money to the UK - with London in particular attracting lots of interest.

According to Selwyn Lim, director of Mouseprice, the capital is increasingly being viewed by foreign nationals as a "safe haven for investment".

This sentiment is being fuelled partly by the continuing debt crisis in the eurozone, as Britain uses its own currency and is not part of the monetary union.

Mr Lim said this is why house prices in London are going up. The latest figures from the Office for National Statistics showed that property values in the city rose by 7.2 per cent during the year to May 2012. This was well above the national increase of just 2.3 per cent during the same period.

"Wealthy individuals from around the world are bringing money to the capital," he observed.

"Around the country, prices are quite stagnant, but in London the situation is quite different."

Mr Lim described London as the only part of the UK that has seen a substantial increase in property values during the last year.

However, he noted this trend has led to above-average rates of growth in towns located in the vicinity of the capital.

"There is obviously going to be some knock-on effect on the immediate areas," Mr Lim commented.

This backs up recent observations from estate agent Prickett & Ellis, which noted many of those purchasing homes in London hail from Italy and Greece - two countries that are struggling with debt problems.

Nigel Ellis, director of the company, stated that this trend is showing no signs of abating, which means he cannot see how much higher property prices are likely to go. Indeed, he argued there is potentially no limit, as values are being inflated by the limited supply as well as demand.